Rule 68B Cannot Revive Time-Barred Property Sale Proceedings: Madras HC

TASC Jawaahar Ayya Vs PCIT (Madras High Court)

Summary: The Madras High Court considered a challenge to the proclamation of sale dated 10.07.2025 concerning property of the petitioner, who was a partner of M/s RJK Investments, and the consequential request for release of the property from attachment. Assessment orders had been issued against the partnership firm for assessment years 2007-2008 to 2011-2012. Demand notices under Section 156 of the Income Tax Act, 1961 were issued and certificates were drawn up by the Tax Recovery Officer under Section 222, followed by proceedings under the Second Schedule. The principal issue was whether the proposed sale was barred by limitation under Rule 68B. For assessment years 2007-2008 and 2008-2009, the assessment orders were issued on 28.12.2009 and 28.12.2010 respectively and no appeals were filed. The Court held that, even reckoning limitation from expiry of thirty days from issuance of the respective demand notices, the then applicable three-year periods expired on 31.03.2013 and 31.03.2014. Since those periods had expired before Rule 68B was amended with effect from 01.09.2019 to extend limitation from three to seven years, the amended period could not revive the time-barred proceedings. Accordingly, sale in relation to certificates for these two assessment years was barred by limitation. For assessment year 2009-2010, however, the statutory appeal was decided on 23.08.2016 and the relevant financial year ended on 31.03.2017. The original three-year limitation would have expired on 31.03.2020, after the amendment took effect on 01.09.2019.